Life Insurance

Single Premium Life Insurance

Life Insurance leverages client’s funds to create an estate that can provide for their beneficiaries. Single-premium whole life (SPWL) is a type of life insurance in which a lump sum of money is paid into the policy in return for a death benefit that is guaranteed to remain paid-up until you die.

With single-premium life insurance, the cash invested builds up quickly because the policy is fully funded. The death benefit amount depends on the amount invested and the age and health of the insured. Example, a younger person is calculated to have a longer remaining life expectancy, giving the funds paid in the premium more time to grow before the death benefit is expected to be paid out. The larger the premium deposit the greater the death benefit available in the contract.

While the death benefits of insurance policies provide you with an efficient means to provide for your dependents, you also need to consider unexpected expenses that can crop up in old age. Some SPWL policies will give you tax-free access to the death benefit to pay for long-term care expenses. This feature can help protect your other assets from the potentially overwhelming cost of long-term care. The death benefit remaining in the policy when you die will pass income-tax free to your beneficiaries. And if you don't use any of it, the money will go to your loved ones just as you had originally planned. Therefore, your SPWL plan allows you to cover your long-term care needs as required, but still leaves the maximum possible amount of your death benefit intact for your dependents.

A number of SPWL plans also include a feature that will let you withdraw part of the death benefit if you are diagnosed with a terminal illness and have a life expectancy of 12 months or less. This flexibility can make the decision to sink away a large single-premium payment into a SPWL policy less daunting for some people, and it is important to consider if you have limited financial assets outside of your SPWL.